Leisure firm G1 Group has reported a 24 per cent rise in pre-tax profits to £8.17 million for the 2013 year to March 31.

The Glasgow-based group said turnover rose 11 per cent on the previous year to £65.9 million (2012: £59.3 million) and operating profits rose 36 per cent to £10.2 million (2012: £7.48 million).

Chairman Brian McGhee said the increase in turnover reflects the full-year benefits of 2011 acquisitions, which featured in 2012 results though only for part of the trading year.

Last year G1 reported a 20 per cent rise in turnover for the 2012 year to March to £59.3 million and 46 per cent rise in operating profits to £7.48 million.

The G1 acquisitions referenced include the portfolio of Edinburgh properties previously held by Festival Group, which were sold to G1 and Saltire Taverns in a pre-pack deal in 2011 in a deal which saved 175 jobs.

G1, led by Stefan King, formed a new division - called EH1 – following its acquisition of The Murrayfield Hotel, Biddy Mulligans, The Three Sisters and The Bank Hotel, all in Edinburgh.

The group said the strong 2013 financial performance was down to “carefully targeted investment in the existing portfolio”.

Looking ahead, McGhee said: “Although the economy has followed an uncertain path in recent years, the group has continued to develop in the leisure and hospitality sectors.

“Whilst these economic conditions look likely to continue beyond 2013, the quality of the venues and commitment to service excellence gives the directors confidence that the group can address the challenges and successfully continue to expand.”

The group invested a total of £9.6 million in its estate during the financial year “to maintain its integrity and market position”.

The group net debt position at the year-end was £77.9 million, up from £70.2 million at the 2012 year end.

G1 Group said it has managed to mitigate the impact of rising utility costs using the “significant purchasing power” of its diversified leisure portfolio.

G1 opened a new development in St Andrews in the the 2013 financial year, refurbishing a former golf club manufacturing property to a new bar and restaurant called Forgan's, named after the former manufacturer.

The group notes in full-year audited accounts G1 changed the ownership structure of IP Partnership Ltd from a joint venture operation to a subsidiary of the group “on the last day of the financial period”.

As part of that restructuring, G1 Group Plc drew down £2.5 million from its existing facilities, which it loaned to IP Partnership “together with external debt provided by Tennent Caledonian Breweries UK Limited".

The debt restructuring saw all existing issued share capital transfer to G1 Group Plc from a combination of G1 Group (Holdings) Plc and Star Pubs & Bars Ltd.

G1 also notes than during that period, a 10 per cent shareholding was “issued to a third party” - currently controlled by Lloyds Banking Group – which G1 Group Plc retains an option to purchase.

G1 goes on to note in 2013 full-year results: “In early 2013 the joint venture company reached agreement with its bankers, Lloyds Banking Group, to repay its existing facilities at discount from par value.

“In addition, and impairment of tangible fixed assets was recognised in the year for the joint venture company.

“The directors of the business have reviewed the carrying value of the tangible fixed assets of the business in light of the property market conditions and consequently an impairment of £2,685,000 has been taken on the group property assets.”

G1 Group notes on April 5, 2013 it increased its shareholding in IP Partnership Ltd, which is now being accounted for as a subsidiary having previously been accounted for as a joint venture.

The group recently moved into its new Hamilton House headquarters in the west end of Glasgow, which was the former headquarters of BBC Scotland.

G1 Group owns more than 40 venues throughout Scotland, ranging from restaurants, bars and clubs to cinemas and hotels.

The group employs 1,272 people, including 457 managerial and administration staff and 815 hourly paid staff.